<PAGE>
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS Under Section 12(b) or (g) of the Securities Exchange Act of 1934
LA INVESTMENT ASSOCIATES, INC.
---------------------------------------------
(Name of Small Business Issuer in its charter)
NEVADA 88-0406903
-------------------------- ---------------------------
(State) (I.R.S. Employer Identification No.)
1900 Decker School Lane Malibu, CA 90265
- - - - - - - - - - ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (310) 589-0210
--------------
Securities to be registered under Section 12(b) of the Act.
Not applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value per share
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This registration statement contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
Section 27A of the Securities Act of 1933, as amended, and is subject to the
safe harbors created by those sections. These forward-looking statements are
subject to significant risks and uncertainties, including information included
under Items 1 and 2 of this registration statement, which may cause actual
results to differ materially from those discussed in such forward-looking
statements. The forward-looking statements within this registration statement
are identified by words such as "believes", "anticipates", "expects", "intends",
"may", "will" and other similar expressions regarding the Company's intent,
belief and current expectations. However, these words are not the exclusive
means of identifying such statements. In addition, any statements which refer to
expectations, projections or other characterizations of future events or
circumstances and statements made in the future tense are forward-looking
statements. Readers are cautioned that actual results may differ materially from
those projected in the forward looking statements as a result of various
factors, many of which are beyond the control of the Company. The Company
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements which may be made to reflect events or
circumstances occurring subsequent to the filing of this registration statement
with the SEC. Readers are urged to carefully review and consider the various
disclosures made by the Company in this registration statement.
Page 1
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS:
BUSINESS DEVELOPMENT SINCE INCEPTION:
LA Investment Associates, Inc. (the "Company") was incorporated in Nevada on
June 19, 1990, under the name of American Long Distance Services, Inc. The
Company's founders were Linda Friedman and Barry Friedman, none of whom have
been associated in any capacity with the Company since February 1991. Thereafter
the officers of the Company were Paul W. Andre, M. Paula Rowe, and Sandra J.
Andre, none of whom have been associated with the Company since May 1999. The
Company changed its name to LA Associates, Inc. in August 1990, and then to LA
Investment Associates, Inc. on October 19, 1998. On September 30, 1999, the
Company had not yet commenced any formal business operations, and all activity
to date relates to the Company's formation and proposed fund raising.
The Company will attempt to locate and negotiate with a business entity for the
merger, or some other business combination, of that target into the Company. In
certain instances, a target company may wish to become a subsidiary of the
Company or may wish to contribute assets to the Company rather than merge. No
assurances can be given that the Company will be successful in locating or
negotiating with any target company.
The Company was formed to provide a method for a foreign or domestic private
company to become a reporting ("public") company whose securities are qualified
for trading in the United States secondary market.
There are certain perceived benefits to being a reporting company with a class
of publicly-traded securities qualified for trading in the United States
secondary market. These are commonly thought to include the following:
* the ability to register and use registered securities to acquire assets or
businesses;
* increased visibility;
* the facilitation of borrowing from financial institutions;
* improved trading efficiency;
* shareholder liquidity;
* greater ease in subsequently raising capital;
* compensation of key employees through stock options;
* enhanced corporate image;
* a presence in the United States capital markets.
Page 2
<PAGE>
A business entity, if any, which may be interested in a business combination
with the Company may include the following:
* a company for whom a primary purpose of becoming public is the use of its
securities for the acquisition of assets or businesses;
* a company which is unable to find an underwriter of its securities or is
unable to find an underwriter of securities on terms acceptable to it;
* a company which wishes to become public with less dilution of its common
stock than would occur upon an underwriting;
* a company which believes that it will be able obtain investment capital on
more favorable terms after it has become public;
* a foreign company which may wish an initial entry into the United States
securities market;
* a special situation company, such as a company seeking a public market to
satisfy redemption requirements under a qualified Employee Stock Option Plan;
* a company seeking one or more of the other perceived benefits of becoming a
public company.
A business combination with a target company may involve the transfer to the
target company of the majority of the issued and outstanding common stock of the
Company, and the substitution by the target business of its own management and
board of directors No assurances can be given that the Company will be able to
enter into a business combination, as to the terms of a business combination, or
as to the nature of the target company.
The proposed business activities described herein classify the Company as a
"blank check" company. See "GLOSSARY". The Securities and Exchange Commission
and many states have enacted statutes, rules and regulations limiting the sale
of securities of blank check companies.
The Company is voluntarily filing this Registration Statement with the
Securities and Exchange Commission and is under no obligation to do so under the
Securities Exchange Act of 1934, as amended.
The Company's business is subject to numerous risk factors, including the
following:
NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS. The Company has had no
operating history nor any revenues or earnings from operations. The Company has
no significant assets or financial resources. The Company will, in all
likelihood, sustain operating expenses without corresponding revenues, at least
until the consummation of a business combination. This may result in the Company
incurring a net operating loss which will increase continuously until the
Company can consummate a business combination with a target company.
SPECULATIVE NATURE OF THE COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the target company. While
management intends to seek business combinations with entities having
established operating histories, there can be no assurance that the Company will
be successful in locating candidates meeting such criteria. In the event the
Company completes a business combination the success of the Company's
operations, most likely, will be dependent upon management of the target company
and numerous other factors beyond the Company's control.
Page 3
<PAGE>
SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS. The
Company is and will continue to be an insignificant participant in the business
of seeking mergers with and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be merger or
acquisition target candidates for the Company. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully completing a business combination. Moreover, the Company will also
compete with numerous other small public companies in seeking merger or
acquisition candidates.
NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION-NO STANDARDS FOR
BUSINESS COMBINATION. The Company has no arrangement, agreement or understanding
with respect to engaging in a merger with or acquisition of a business entity.
The Company has not established a specific length of operating history or a
specified level of earnings, assets, net worth or other criteria which it will
require a target business opportunity to have achieved, or without which the
Company would not consider a business combination with such business entity.
Accordingly, the Company may enter into a business combination with a business
entity having no significant operating history, losses, limited or no potential
for earnings, limited assets, negative net worth or other negative
characteristics.
CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking a
business combination, management anticipates devoting up to 30 hours per month
to the business of the Company. The Company's sole officer and director has not
entered into a written employment agreement with the Company and he is not
expected to do so in the foreseeable future. The Company has not obtained key
man life insurance on its sole officer and director. Notwithstanding the
combined limited experience and limited time commitment of management, loss of
the services of this individual would adversely affect development of the
Company's business and its likelihood of continuing operations. See
"MANAGEMENT."
CONFLICTS OF INTEREST-GENERAL. The Company's sole officer and director
participates in other ventures which may compete directly with the Company.
Additional conflicts of interest and non-arms length transactions may also arise
in the future. Management has adopted a policy that requires full disclosure of
any potentially conflicting relationships..
See "ITEM 6. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS."
Page 4
<PAGE>
REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") requires
companies subject thereto to provide certain information about significant
acquisitions including certified financial statements for the company acquired
covering one or two years, depending on the relative size of the acquisition.
The time and additional costs that may be incurred by some target companies to
prepare such statements may significantly delay or essentially preclude
consummation of an otherwise desirable acquisition by the Company. Acquisition
prospects that do not have or are unable to obtain the required audited
statements may not be appropriate for acquisition so long as the reporting
requirements of the Exchange Act are applicable.
LACK OF DIVERSIFICATION. The Company's proposed operations, even if successful,
will in all likelihood result in the Company engaging in a business combination
with only one business opportunity. Consequently, the Company's activities will
be limited to those engaged in by the business which the Company merges with or
acquires. The Company's inability to diversify its activities into a number of
areas may subject the Company to economic fluctuations within a particular
business or industry and therefore increase the risks associated with the
Company's operations.
REGULATION. Although the Company will be subject to regulation under the
Exchange Act, management believes the Company will not be subject to regulation
under the Investment Company Act of 1940, insofar as the Company does not intend
to be engaged in the business of investing or trading in securities. However, if
as a result of acquisitions, the Company does hold passive investment interests
in a number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940. (See "Acquisition Restrictions")
PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination involving the
issuance of the Company's common stock will, in all likelihood, result in
shareholders of a target company obtaining a controlling interest in the
Company. Any such business combination may require the Company's sole officer
and director to sell or transfer all or a portion of the Company's common stock
held by him, and to resign as a member of the Board of Directors and an officer
of the Company. The resulting change in control of the Company could result in
removal of the present sole officer and director of the Company and a
corresponding reduction in or elimination of his participation in the future
affairs of the Company.
REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION. The
Company's primary plan of operation is based upon a business combination with a
business entity which, in all likelihood, will result in the Company issuing
securities to shareholders of such business entity. The issuance of previously
authorized and unissued common stock of the Company would result in reduction in
the percentage of shares owned by the present shareholders of the Company and
would most likely result in a change in control or management of the Company.
ASPECTS OF BLANK CHECK COMPANIES. The Company may enter into a business
combination with a business entity that desires to establish a public trading
market for its shares if the Company has shares that are trading publicly. A
target company may attempt to avoid what it deems to be adverse consequences of
undertaking its own public offering by seeking a business combination with the
Company. Such consequences may include, but are not limited to, time delays of
the registration process, significant expenses to be incurred in such an
offering, loss of voting control to public shareholders or the inability to
obtain an underwriter or to obtain an underwriter on terms satisfactory to the
Company. There is no assurance that a trading market will ever develop in the
Company's securities.
Page 5
<PAGE>
TAXATION. Federal and state tax consequences will, in all likelihood, be major
considerations in any business combination the Company may undertake. Currently,
such transactions may be structured so as to result in tax-free treatment to
both companies, pursuant to various federal and state tax provisions. The
Company intends to structure any business combination so as to minimize the
federal and state tax consequences to both the Company and the target company;
however, there can be no assurance that such business combination will meet the
statutory requirements of a tax-free reorganization or that the parties will
obtain the intended tax-free treatment upon a transfer of stock or assets. A
non-qualifying reorganization could result in the imposition of both federal and
state taxes which may have an adverse effect on both parties to the transaction.
YEAR 2000. The Year 2000 problem is the result of computer programs being
written using two digits (rather than four) to define the applicable year. Any
programs that have date-sensitive software or equipment that has time-sensitive
embedded components may recognize a date using "00" as the year 1900 rather than
the Year 2000. This could result in a major system failure or miscalculations.
The Company has no computers and will not face any Year 2000 related problems.
The Company will not enter into an acquisition transaction with any business
that has an unresolved Year 2000 problem.
REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS
OPPORTUNITIES. Management of the Company will request that any potential
business opportunity provide audited financial statements. One or more
attractive business opportunities may choose to forego the possibility of a
business combination with the Company rather than incur the expenses associated
with preparing audited financial statements. Such audited financial statements
may not be available. In such case, the Company intends to obtain certain
assurances as to the target company's assets, liabilities, revenues and expenses
prior to consummating a business combination, with further assurances that an
audited financial statement would be provided after closing of such a
transaction. Closing documents relative thereto may include representations that
the audited financial statements will not materially differ from the
representations included in such closing documents.
The Company's ability to commence operations is contingent upon its ability to
identify a prospective target business and raise the capital it will require
through the issuance of equity securities, debt securities, bank borrowings or a
combination thereof.
Page 6
<PAGE>
ITEM 2. PLAN OF OPERATION
The Company intends to merge with or acquire a business entity in exchange for
the Company's securities. The Company anticipates seeking out a target business
through solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting firms,
investment bankers, financial advisors and similar persons, the use of one or
more World Wide Web sites and similar methods. No estimate can be made as to the
number of persons who will be contacted or solicited.
The Company has no full time employees. The Company's sole officer and director
has agreed to allocate a portion of his time to the activities of the Company,
without compensation. He anticipates that the business plan of the Company can
be implemented by his devoting approximately 30 hours per month to the business
affairs of the Company. Consequently, conflicts of interest may arise with
respect to the limited time commitment by him. The Company's sole officer and
director expects in the future to become involved with other companies which
have a business purpose similar to that of the Company. A conflict may arise in
the event that another company, or a company to be formed, with which management
is affiliated seeks a target business. See "ITEM 6. DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS." The Certificate of Incorporation of
the Company provides that the Company may indemnify officers and/or directors of
the Company for liabilities, which can include liabilities arising under the
securities laws. Therefore, assets of the Company could be used or attached to
satisfy any liabilities subject to such indemnification.
GENERAL BUSINESS PLAN
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in a business entity presented to it by persons or
firms who or which desire to seek the perceived advantages of a corporation
which has a class of securities registered under the Exchange Act. The Company
will not restrict its search to any specific business, industry, or geographical
location and the Company may participate in a business venture of virtually any
kind or nature. This discussion of the proposed business is not meant to be
restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. The Company's sole officer and
director anticipates that it will be able to participate in only one business
venture because the Company has nominal assets and limited financial resources.
See PART F/S, "FINANCIAL STATEMENTS." This lack of diversification should be
considered a substantial risk to the shareholders of the Company because it will
not permit the Company to offset potential losses from one venture against gains
from another.
The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly-owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
Page 7
<PAGE>
The Company anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, and providing liquidity for
shareholders and other factors. Business opportunities may be available in many
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis of such business
opportunities difficult and complex.
The Company has, and will continue to have, no capital with which to provide the
owners of business opportunities. However, management believes the Company will
be able to offer owners of acquisition candidates the opportunity to acquire
ownership interest in a publicly registered company without incurring the cost
and time required to conduct an initial public offering. The officer and
director of the Company has not conducted market research and is not aware of
statistical data to support the perceived benefits of a merger or acquisition
transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the sole officer and director of the Company, who is not a
professional business analyst. In analyzing prospective business opportunities,
management will consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available; the potential for further research, development, or exploration;
specific risk factors not now foreseeable but which then may be anticipated to
impact the proposed activities of the Company; the potential for growth or
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, or trades; name identification; and other
relevant factors. To the extent possible, the Company intends to utilize written
reports and personal investigation to evaluate the above factors. The Exchange
Act requires that any merger or acquisition candidate comply with certain
reporting requirements, which include providing audited financial statements to
be included in the reports to be filed under the Exchange Act. The Company will
not acquire or merge with any company for which audited financial statements
cannot be obtained at or within a reasonable period of time after closing of the
proposed transaction.
The sole officer and director of the Company, which in all likelihood will not
be experienced in matters relating to the business of a target company, will
rely upon his own efforts in accomplishing the business purposes of the Company.
It is anticipated that outside consultants or advisors may be utilized by the
Company to assist in the search for qualified target companies. If the Company
does retain such an outside consultant or advisor, any cash fee earned by such
party will need to be paid by the prospective merger/acquisition candidate, as
the Company has limited cash assets with which to pay such obligation. The
Company may pay all or some of such consultant's or advisor's fee with
previously authorized but unissued shares.
Page 8
<PAGE>
The Company will not restrict its search for any specific type of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in any stage of its business life. It is impossible to
predict at this time the status of any business in which the Company may become
engaged, in that such business may need to seek additional capital, may desire
to have its shares publicly traded, or may seek other perceived advantages which
the Company may offer.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present Management and shareholders of the Company will
no longer be in control of the Company. In addition, the Company's sole officer
and director may, as part of the terms of the acquisition transaction resign and
be replaced by one or more new directors without a vote of the Company's
shareholders or may sell his stock in the Company.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon an exemption from registration under applicable federal
and state securities laws. In some circumstances, however, as a negotiated
element of its transaction, the Company may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it may be undertaken by the surviving entity after the Company has
entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. The issuance of substantial additional securities and their potential
sale into any trading market which may develop in the Company's securities may
have a depressive effect on the market value of the Company's securities in the
future if such a market develops, of which there is no assurance.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a "tax-free" reorganization under Sections
351 or 368 of the Internal Revenue Code of 1986, as amended (the "Code").
With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which target
company shareholders would acquire in exchange for all of their shareholdings in
the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. The percentage ownership may be subject to significant
reduction in the event the Company acquires a target company with substantial
assets. Any merger or acquisition effected by the Company can be expected to
have a significant dilutive effect on the percentage of shares held by the
Company's shareholders at such time.
Page 9
<PAGE>
The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties, will specify certain events of
default, will detail the terms of closing and the conditions which must be
satisfied by the parties prior to and after such closing, will outline the
manner of bearing costs, including costs associated with the Company's attorneys
and accountants, and will include other terms.
The Company will not acquire or merge with any entity which cannot provide
audited financial statements at a closing of the proposed transaction or
represent that it will provide audited financial statements within a reasonable
period of time after closing of the proposed transaction. The Company will be
subject to all of the reporting requirements included in the Exchange Act.
Included in these requirements is the duty of the Company to file audited
financial statements as part of its Form 8-K to be filed with the Securities and
Exchange Commission upon consummation of a merger or acquisition, as well as a
requirement to file audited financial statements in its annual report on Form
10-K (or 10-KSB, as applicable). If such audited financial statements are not
available at closing, or within time parameters necessary to insure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the representations made
by the target company, the closing documents may provide that the proposed
transaction can voided at the discretion of the present management of the
Company.
The Company's sole officer and director has agreed that he may advance to the
Company additional funds which the Company may need for operating capital and
for costs in connection with searching for or completing an acquisition or
merger. There is no minimum or maximum amount such shareholder, or any other
shareholder, may advance to the Company.
The Company does not intend to borrow funds for the purpose of repaying advances
made by shareholders or to make any payments to the Company's promoters,
management or their affiliates.
ACQUISITION RESTRICTIONS
The Company may acquire a company or business by purchasing, trading or selling
the securities of such company or business. However, the Company does not intend
to engage primarily in such activities. Specifically, the Company intends to
conduct its activities so as to avoid being classified as an "investment
company" under the Investment Company Act of 1940, and therefore avoid
application of the costly and restrictive registration and other provisions of
the Investment Company Act of 1940 and the regulations promulgated thereunder.
Section 3(a) of the Penny Stock Reform Act expects from the definition of an
"investment company" an entity which does not engage primarily in the business
of investing, reinvesting or trading in securities, or which does not engage in
the business of investing, owning, holding or trading "investment securities"
(defined as "all securities other than government securities or securities of
majority-owned subsidiaries") the value of which exceed 40% of the value of its
total assets (excluding government securities, cash or cash items). The Company
intends to implement its business plan in a manner which will result in the
availability of this exception from the definition of "investment company."
Consequently, the Company's acquisition of a company or business through the
purchase and sale of investment securities will be limited. Although the Company
intends to act to avoid classification as an investment company, the provisions
of the Investment Company Act of 1940 are extremely complex and it is possible
that it may be classified as an inadvertent investment company. The Company
intends to vigorously resist classification as an investment company, and to
take advantage of any exemptions or exceptions from applications of the
Investment Company Act of 1940, which allows an entity a one time option during
any three-year period to claim an exemption as a "transient" investment company.
The necessity of asserting any such resistance, or making any claim of
exemption, could be time consuming and costly, or even prohibitive, given the
Company's limited resources.
Page 10
<PAGE>
The Company's plan of business may involve changes in its capital structure,
management, control and business, especially if it consummates a reorganization
as discussed above. Each of these areas is regulated by the Investment Company
Act of 1940, which regulation has the purpose of protecting purchasers of
investment company securities. Since the Company does not intend to register as
an investment company, the investors in the Company's securities will not be
afforded these protections.
COMPETITION
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire any
properties. The Company currently uses the offices of its sole officer and
director at no cost to the Company. The sole officer and director has agreed to
continue this arrangement until the Company completes an acquisition or merger.
ITEM 4. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS: GENERAL
The Company has not transacted business from formation through December 31, 1998
and had a net loss of $1,050 for that period. For the six months ended June 30,
1999 it had a net loss of $3,200. The Company had nominal assets at December 31,
1998 and June 30, 1999. The Company's ability to acquire a business is dependent
on its raising financing through the sale of equity and/or debt securities.
Page 11
<PAGE>
ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
The number of shares of the Company's common stock owned by the Company's
directors and officers and by each person who owns legally and beneficially more
than five percent of the Company's issued and outstanding common stock at
October 25, 1999, the address of each such person and the percentage of the
common stock represented by such shares is set forth in the following table.
Unless otherwise indicated all ownership is both legal and beneficial.
<TABLE>
<CAPTION>
NAME ADDRESS # OF SHARES PERCENTAGE
- - - - - - - - - - ------------------- -------------------------------- -------------------- ---------------------
<S> <C> <C> <C>
Randall Prouty 1900 Decker School Lane 3,000,000 58.71%
Malibu, CA 90265
Jonathan Lichtman Kirkaldy Lane 525,000 10.27%
Boca Raton, FL 33498
Stephen Danner Orchid Drive
Miami Lakes, FL 33014 350,000 6.85%
All Executive Officers and Directors as a Group (1 person) 58.71%
</TABLE>
ITEM 6. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The names, ages and terms of office of directors and executive officers of the
Company are set forth in the following table:
NAME AGE POSITIONS DIRECTOR SINCE
- - - - - - - - - - ----------- -------- ----------------- -----------------------
Randall Prouty 47 President May 1999
Secretary
Each director is elected by holders of a majority of the Common Stock to serve
for a term of one year and until his successor is elected and qualified, which
is generally at the annual meeting of stockholders. Officer(s) serve at the will
of the board, subject to possible future employment agreements which would
establish term, salary, benefits and other conditions of employment.
Randall Prouty - Biography
- - - - - - - - - - --------------------------
In 1997 Mr. Prouty co-founded Advanced Communication Technologies, Inc., (OTC:BB
ADVC), a telecommunications company involved in developing next generation
wireless equipment for teleco level use, and where he still a shareholder and
serves as a Director. Mr. Prouty is also the President and sole owner of Bristol
Realty Corporation since 1984, a firm active in the commercial real estate
finance and brokerage market. And finally, he is the sole owner of Bristol
Capital, Inc., a firm active in consulting and business development work for
companies seeking access to capital markets, and through which he is incubating
other e-business ventures.
Page 12
<PAGE>
Mr. Prouty was exposed the public markets in the early 1990's while assembling
commercial real estate assets used to back REMICs (mortgage backed securities)
offered by Donaldson, Lufkin and Jenrette and others. Prior to that time his
career includes successful efforts as a real estate construction lender, workout
specialist and investment advisor. Mr. Prouty is a licensed real estate and
mortgage broker in the State of Florida and is considered an expert in real
estate finance.
Mr. Prouty has a technical background that includes being a qualified
webmaster/hostmaster with experience in developing e-businesses on the web. He
is currently developing a system related real estate securities and other
financial products for use on the web.
BLANK CHECK COMPANIES
Mr. Prouty has not been, nor is he currently an officer, director, or control
person of a blank check company other than the Company.
CONFLICTS OF INTEREST
The Company's sole officer and director may organize other companies of a
similar nature and with a similar purpose as the Company. Consequently, there
are potential inherent conflicts of interest in acting as an officer and
director of the Company. Insofar as the officer and director is engaged in other
business activities, Management anticipates that it will devote only a minor
amount of time to the Company's affairs. The Company does not have a right of
first refusal pertaining to opportunities that come to Management's attention
insofar as such opportunities may relate to the Company's proposed business
operations. A conflict may arise in the event that another blank check company
with which Management is affiliated is formed and actively seeks a target
business.
Mr. Prouty intends to devote as much time to the activities of the Company as
required. However, should a conflict arise, there is no assurance that Mr.
Prouty would not attend to other matters prior to those of the Company.
The terms of a business combination may provide for payment by cash or otherwise
to the current shareholders of the Company for the purchase of their common
stock of the Company by a target business. The current shareholders would
directly benefit from such payment. Such benefits may influence Management's
choice of a target business.
The Company's sole officer and director owns 58.71% of the outstanding shares of
common stock of the Company. The Company does not expect to issue other
securities or rights to securities of the Company to the sole officer and
director or promoters, or their affiliates or associates, prior to the
completion of a business combination. At the time of a business combination some
of the common stock owned by the sole officer and director may be purchased by
the target business. The amount of common stock sold or continued to be owned by
the sole officer and director cannot be determined at this time.
Page 13
<PAGE>
Management may agree to pay finder's fees, as appropriate and allowed, to
unaffiliated persons who may bring a target business to the Company where that
referral results in a business combination. The amount of any finder's will be
subject to negotiation, and cannot be estimated at this time.
Management has adopted certain policies involving possible conflicts of
interest, including prohibiting any of the following transactions involving
management or promoters or their affiliates or associates:
(i) Any lending by the Company to such persons; or
(ii) The issuance of any additional securities to such persons prior to a
business combination.
These policies have been adopted by the Board of Directors of the Company, and
any changes in these provisions would require the approval of the Board of
Directors. Management does not intend to propose any such action and does not
anticipate that any such action will occur.
There are no binding guidelines or procedures for resolving potential conflicts
of interest. Failure by management to resolve conflicts of interest in favor of
the Company could result in liability of management to the Company. However, any
attempt by shareholders to enforce a liability of management to the Company
would most likely be prohibitively expensive and time consuming.
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Exchange Act,
management believes the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company does not intend to be
engaged in the business of investing or trading in securities. However, if as a
result of acquisitions, the Company does hold passive investment interests in a
number of entities, the Company could be subject to regulation under the
Investment Company Act of 1940.
Page 14
<PAGE>
ITEM 7. EXECUTIVE COMPENSATION.
The Company's sole officer and director does not receive any compensation for
his services rendered to the Company, nor has he received such compensation in
the past. As of the date of this registration statement, the Company has no
funds available to pay the sole officer and director. Further, the sole officer
and director is not accruing any compensation pursuant to any agreement with the
Company.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of its
employees.
ITEM 8. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On October 21, 1999, the Company issued a total of 3,000,000 shares of Common
Stock to the following persons for a total of $50,000 ($.02 per share)
NAME NUMBER OF SHARES CONSIDERATION
- - - - - - - - - - ------------------------ ---------------- -------------
Randall Prouty (1) 3,000,000 $50,000
(1) Randall Prouty may be deemed a "parent" and "promoter" of the Company as
those terms are defined under the Securities Act. There are no other "parents"
or "promoters" of the Company.
The proposed business activities described herein classify the Company as a
"blank check" company. See "GLOSSARY". The Securities and Exchange Commission
and many states have enacted statutes, rules and regulations limiting the sale
of securities of blank check companies. Management does not intend to undertake
any efforts to cause a market to develop in the Company's securities until such
time as the Company has successfully implemented its business plan described
herein.
ITEM 9. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 25,000,000 shares of
Common Stock, par value $.001 per share. The following statements relating to
the capital stock are summaries and do not purport to be complete. Reference is
made to the more detailed provisions of, and such statements are qualified in
their entirety by reference to, the Certificate of Incorporation and the
By-laws, copies of which are filed as exhibits to this registration statement.
Page 15
<PAGE>
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders. Holders of common stock do not have
cumulative voting rights. Holders of common stock are entitled to share ratably
in dividends, if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefor. In the event
of a liquidation, dissolution or winding up of the Company, the holders of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. All of the outstanding shares of common stock are,
fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the Company's
common stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
The issuance of shares of Preferred Stock, or the issuance of rights to purchase
such shares, could be used to discourage an unsolicited acquisition proposal.
For instance, the issuance of a series of Preferred Stock might impede a
business combination by including class voting rights that would enable the
holder to block such a transaction, or facilitate a business combination by
including voting rights that would provide a required percentage vote of the
stockholders. In addition, under certain circumstances, the issuance of
Preferred Stock could adversely affect the voting power of the holders of the
Common Stock. Although the Board of Directors is required to make any
determination to issue such stock based on its judgment as to the best interests
of the stockholders of the Company, the Board of Directors could act in a manner
that would discourage an acquisition attempt or other transaction that some, or
a majority, of the stockholders might believe to be in their best interests or
in which stockholders might receive a premium for their stock over the then
market price of such stock. The Board of Directors does not at present intend to
seek stockholder approval prior to any issuance of currently authorized stock,
unless otherwise required by law or stock exchange rules. The Board of Directors
has also elected to opt out of the Delaware Anti-Takeover Statutes. This would
make it easier for parties presently not associated with the Company to obtain
control of the Company without approval of the shareholders. The Company has no
present plans to issue any Preferred Stock.
DIVIDENDS
The Company does not expect to pay dividends. Dividends, if any, will be
contingent upon the Company's revenues and earnings, if any, capital
requirements and financial conditions. The payment of dividends, if any, will be
within the discretion of the Company's Board of Directors. The Company presently
intends to retain all earnings, if any, for use in its business operations and
accordingly, the Board of Directors does not anticipate declaring any dividends
in the foreseeable future.
Page 16
<PAGE>
GLOSSARY
"Blank Check" Company: As defined in Section 7(b)(3) of the Securities Act: A
"blank check" is a development stage company that has
no specific business plan or purpose or has indicated
that its business plan is to engage in a merger or
acquisition with an unidentified company or companies
and is issuing "penny stock" securities as defined in
Rule 3a51-1 of the Exchange Act.
Securities Exchange Act: The Securities Exchange Act of 1934, as amended.
"Penny Stock" Security As defined in Rule 3a51-1 of the Exchange Act, a "penny
stock" security is any equity security other than a
security (i) that is a reported security (ii) that is
issued by an investment company (iii) that is a put or
call issued by the Option Clearing Corporation; (iv)
that has a price of $5.00 or more (except for purposes
of Rule 419 of the Securities Act); (v) that is
registered on a national securities exchange; (vi) that
is authorized for quotation on the Nasdaq Stock Market,
unless other provisions of Rule 3a51-1 are not
satisfied; or (vii) that is issued by an issuer with
(a) net tangible assets in excess of $2,000,000, if in
continuous operation for more than three years or
$5,000,000 if in operation for less than three years or
(b) average revenue of at least $6,000,000 for the last
three years.
Securities Act: The Securities Act of 1933, as amended.
Small Business Issuer: As defined in Rule 12b-2 of the Exchange Act, a "Small
Business Issuer" is an entity (i) which has revenues of
less than $25,000,000 (ii) whose public float (the
outstanding securities not held by affiliates) has a
value of less than $25,000,000 (iii) which is a United
States or Canadian issuer (iv) which is not an
Investment Company and (v) if a majority-owned
subsidiary, whose parent corporation is also a small
business issuer.
Page 17
<PAGE>
PART II
ITEM 1. MARKET PRICE FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is quoted under the stock symbol "LAIV" on the OTC
Pink Sheets. The following table sets forth the approximate high and low bid and
asked quotations for the Company's Common Stock for the four quarters ended
September 30, 1999. These quotations are inter-dealer quotations without retail
markup, markdown or commissions and may not represent actual transactions.
Quarter ended: High Bid Low Bid High Ask Low Ask
- - - - - - - - - - ------------------ -------- -------- -------- -------
January 1, 1999
THRU Unpriced Upriced Unpriced Unpriced
March 31, 1999
April 1, 1999
THRU Unpriced Upriced Unpriced Unpriced
June 30 ,1999
July 1, 1999
THRU Unpriced Upriced Unpriced Unpriced
September 22, 1999
September 23, 1999
THRU 2.00 1.01 3.50 3.25
September 30, 1999
The closing high bid and low asked quotations for the Company's common stock on
September 30, 1999 were $2.00 and $3.25 respectively.
NUMBER OF STOCKHOLDERS. As of November 1, 1999, the Company had sixty-four (63)
stockholders of record and an estimated 100 beneficial shareholders.
(a) The Securities and Exchange Commission has adopted Rule 15g-9 which
established the definition of a "penny stock." For purposes relevant to the
Company, a penny stock is any equity security that has a market price of less
than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by the
Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
Page 18
<PAGE>
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers the NASDAQ Stock Market, has established certain criteria for
initial and continued eligibility for listing on the NASDAQ Stock Market. In
order to qualify for listing on the NASDAQ SmallCap Market, a company must have
at least (i) net tangible assets of $4,000,000 or market capitalization of
$50,000,000 or net income for two of the last three years of $750,000; (ii)
public float of 1,000,000 shares with a market value of $5,000,000; (iii) a bid
price of $4.00; (iv) three market makers; (v) 300 shareholders and (vi) an
operating history of one year or, if less than one year, $50,000,000 in market
capitalization. For continued listing on the NASDAQ SmallCap Market, a company
must have at least (i) net tangible assets of $2,000,000 or market
capitalization of $35,000,000 or net income for two of the last three years of
$500,000; (ii) a public float of 500,000 shares with a market value of
$1,000,000; (iii) a bid price of $1.00; (iv) two market makers; and (v) 300
shareholders.
There can be no assurances that, upon a successful merger or acquisition, the
Company will qualify its securities for listing on the NASDAQ SmallCap Market or
a national or regional exchange, or be able to maintain the maintenance criteria
necessary to insure continued listing. The failure of the Company to qualify its
securities or to meet the relevant maintenance criteria after such qualification
may result in the discontinuance of the inclusion of the Company's securities.
In such events, trading, if any, in the Company's securities may then continue
in the over-the-counter market. In such case, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the Company's securities.
(b) Holders. There are approximately sixty-three (63) holders of the Company's
Common Shares on November 1, 1999 with a total outstanding of 5,110,000 Common
Shares of $.001 per value stock.
Two Million One (2,100,00) shares were acquired on or before August 10, 1991 by
thirty-five (35) shareholders according to the Company record. The original sale
and issuance of the securities were authorized by resolution of the Board on
August 17, 1991 in reliance upon the exemption from registration requirements of
Section 5 of the Act, as provided in Section (4) (2) of the Act. On or about
August 10, 1991, in reliance on the same exemption, the Company sold and issued
for cash or in cancellation of indebtedness additional shares included in the
2,100,000 common shares.
The Company issued a total of 3,000,000 of its Common Shares to Randall Prouty
for cash at $.02 per share for a total price of $50,000 and another 10,000
shares to Jack Halperin Esq. for legal services.
(c) Dividends. Dividends on the common stock can be paid lawfully only out of
current and retained earnings and surplus of the Company, when, as and if
declared by the board of directors. The Company has not declared or paid any
dividends on the common stock since inception and there is no assurance
dividends will be paid in the foreseeable future. The payment of dividends in
the future rests within the discretion of its board of directors and will
depend, among other things, upon the Company's earnings, its capital
requirements and its financial condition, as well as other factors which the
board of directors deems relevant.
Page 19
<PAGE>
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company has not changed accountants since its formation and there are no
disagreements with the findings of its accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the Company has sold securities which were not
registered as follows:
DATE NAME NUMBER CONSIDERATION
July 14, 1999 Randall Prouty (1) 3,000,000 $50,000
Oct 10, 1999 Jack Halperin, Esq. (2) 10,000 Legal Services
Mr. Prouty is the sole officer and director of the Company and the beneficial
owner of such shares.
Mr. Halperin is the SEC Counsel for the Company.
With respect to the sales made, the Company relied on Section 4(2) of the
Securities Act of 1933, as amended and Rule 506 promulgated thereunder. Each of
the investors in the Company's securities had access to all information
available on the Company. Each investor purchased the securities for his own
account and risk and has not acted as a nominee for others, and has purchased
the securities for investment and not with a view to the distribution of the
securities. Based on the work experience, business sophistication and investment
history of the investors, they were able to evaluate the investment made in the
Company's securities.
Page 20
<PAGE>
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.037 of the Nevada Corporation Law provides that a Nevada corporation
has the power, under specified circumstances, to indemnify its directors,
officers, employees and agents, against expenses incurred in any action, suit or
proceeding. The Certificate of Incorporation and the by-laws of the Company
provide for indemnification of directors and officers to the fullest extent
permitted by the Nevada Corporation Law.
ITEM 6. FINANCIAL STATEMENTS AND EXHIBITS:
Financial statements filed as part of this registration statement.
1. Balance sheet at December 31, 1998.
2. Statements of operations for the year ended June 31, 1998 and for the
Period from June 19, 1990 (inception) to December 31, 1999.
3. Statement of changes in stockholder equity for the Period from June 19,
1990 (inception) Through December 31, 1998.
4. Statement of cash flows for the year ended December 31, 1998 and the Period
from June 19, 1990 (inception) Through December 31, 1998.
5. Notes to financial statements as of December 31, 1998.
6. Balance Sheet as of June 30, 1999.
8. Statement of Operations for the six months ended June 30, 1999 and for the
period from June 19, 1990 (inception) to June 30, 1999.
9. Statement of changes in Stockholders' equity for the period from June 19,
1990 (inception) to June 30, 1999.
10. Statements of cash flows for the six months ended June 30,1999 and for the
period from June 19, 1990 (inception) to June 30, 1999.
11. Notes to financial statements as of June 30, 1999.
EXHIBITS.
3.(i). Articles of Incorporation
3.(ii). Bylaws, as amended
4. Specimen of stock certificate
Page 21
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned thereunto duly authorized representative.
LA INVESTMENT ASSOCIATES, INC.
By: /s/ Randall Prouty Date:
---------------------------- --------------------------
Randall Prouty
President, Secretary
Director
Page 22
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
------------------------------
(FORMERLY L.A. ASSOCIATES, INC.)
--------------------------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1998
-----------------------
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
---------------------------------
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET AS OF DECEMBER 31, 1998
PAGE 3 - STATEMENTS OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1998 AND FOR THE PERIOD FROM
JUNE 19, 1990 (INCEPTION) TO DECEMBER 31,
1998
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY FOR THE PERIOD FROM JUNE 19, 1990,
(INCEPTION) TO DECEMBER 31, 1998
PAGE 5 - STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED
DECEMBER 31, 1998 AND FOR THE PERIOD FROM
JUNE 19, 1990 (INCEPTION) TO DECEMBER 31,
1998
PAGES 6 - 8 - NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors of:
LA Investment Associates, Inc.
We have audited the accompanying balance sheet of LA Investment Associates, Inc.
(Formerly L.A. Associates, Inc. ) (a development stage company) as of December
31, 1998 and the related statements of operations, changes in stockholders'
equity and cash flows for the year ended December 31, 1998 and for the period
from June 19, 1990 (inception) to December 31, 1998. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of LA Investment Associates, Inc.
(Formerly L.A. Associates, Inc.)(a development stage company) as of December 31,
1998, and the results of its operations and its cash flows for the year ended
December 31, 1998 and for the period from June 19, 1990 (inception) to December
31, 1998 in conformity with generally accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
July 26, 1999
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF DECEMBER 31, 1998
-----------------------
ASSETS
------
Cash $ -
----------
TOTAL ASSETS $ -
- - - - - - - - - - ------------ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES $ -
----------
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value, 25,000,000
shares authorized, 2,100,000 issued and
outstanding 2,100
Additional paid in capital (1,050)
Accumulated deficit during development stage (1,050)
----------
Total Stockholders' Equity -
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -
- - - - - - - - - - ------------------------------------------ ==========
See accompanying notes to financial statements.
2
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO DECEMBER 31, 1998
--------------------------------
CUMULATIVE FROM
JUNE 19, 1990 (INCEPTION) FOR THE YEAR ENDED
TO DECEMBER 31, 1998 DECEMBER 31, 1998
Income $ - $ -
Expenses
General and
administrative 1,050 -
----------- ----------
NET LOSS $ (1,050) $ -
- - - - - - - - - - -------- =========== ==========
See accompanying notes to financial statements.
3
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO DECEMBER 31, 1998
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
----------- ----------- ----------- -----------
August 1990, issuance
of common stock $ 100 $ - $ - $ 100
----------- ----------- ----------- -----------
Balance, December 31,
1990 100 - - 100
August 1991, issuance of
common stock 950 - - 950
Net loss 1991 - (1,050) (1,050)
----------- ----------- ----------- -----------
Balance December 31,
1991 1,050 - (1,050) -
January 1, 1992 -
December 31, 1997 - - - -
----------- ----------- ----------- -----------
Balance, December
31, 1997 1,050 - (1,050) -
October 1998, par value
changed from no par
to $.001 (1,049) 1,049 - -
October 1998, forward
stock split 2,000:1 2,099 (2,099) - -
Net loss for the
year ended December
31, 1998 - - - -
----------- ----------- ----------- -----------
BALANCE AT DECEMBER
31, 1998 $ 2,100 $ (1,050) $ (1,050) $ -
- - - - - - - - - - --------- =========== =========== =========== ===========
See accompanying notes to financial statements.
4
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO DECEMBER 31, 1998
CUMULATIVE FROM FOR THE
JUNE 19, 1990 (INCEPTION) YEAR ENDED
TO DECEMBER 31, 1998 DECEMBER 31,1998
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (1,050) $ -
Adjustments to
reconcile net loss
to net cash used
by operating activities: - -
---------- ---------
Net cash used in
operating activities (1,050) -
---------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES - -
---------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance
of common stock 1,050 -
---------- ---------
Net cash provided by
financing activities 1,050 -
---------- ---------
INCREASE IN CASH AND
CASH EQUIVALENTS - -
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - -
---------- ---------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ - $ -
------------- ========== =========
See accompanying notes to financial statements.
5
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- - - - - - - - - - ----------------------------------------------------
A. Organization and Business Operations
----------------------------------------
LA Investment Associates, Inc. (Formerly L.A. Associates, Inc.) (a
development stage company) ("the Company") was incorporated in Nevada
on June 19, 1990 to serve as a vehicle to effect a merger, exchange of
capital stock, asset acquisition or other business combination with a
domestic or foreign private business. At December 31, 1998, the Company
had not yet commenced any formal business operations, and all activity
to date relates to the Company's formation and proposed fund raising.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the capital
it will require through the issuance of equity securities, debt
securities, bank borrowings or a combination thereof.
B. Use of Estimates
--------------------
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
C. Cash and Cash Equivalents
-----------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
6
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONT'D)
- - - - - - - - - - --------------------------------------------------------------
D. Income Taxes
----------------
The Company accounts for income taxes under the Financial Accounting
Standards Board of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" ("Statement 109"). Under Statement 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that
includes the enactment date. There were no current or deferred income
tax expense or benefits due to the Company not having any material
operations from inception to December 31, 1998.
NOTE 2 - STOCKHOLDERS' EQUITY
- - - - - - - - - - ------------------------------
A. Common Stock
----------------
The Company is authorized to issue 25,000,000 shares of common stock at
$.001 par value. The Company has issued 2,100,000 shares through
December 31, 1998.
NOTE 3 - SUBSEQUENT EVENTS
- - - - - - - - - - --------------------------
(A) Agreement and Plan of Reorganization
-----------------------------------------
The Company is in the process of negotiating an Agreement and Plan of
Reorganization with LLO-Gas, Inc., a Delaware corporation, that will
result in the Company acquiring 100% of LLO-Gas, Inc.'s issued and
outstanding stock in consideration for common stock in the Company.
LLO-Gas, Inc. will become a wholly owned subsidiary of the Company.
7
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
NOTE 3 - SUBSEQUENT EVENTS - (CONT'D)
- - - - - - - - - - -------------------------------------
(A) Agreement and Plan of Reorganization - (CONT'D)
----------------------------------------------------
LLO-Gas, Inc. has agreements with a major oil company to acquire
branded service stations. These are existing combination gas and
convenience stores which have a 15 year supply contract to purchase
petroleum products from the same oil company selling the service
stations. The Company expects to acquire additional existing service
stations and also anticipates developing several branded truck stop
facilities which will be supplied by the same oil company.
LLO-Gas, Inc. has entered into agreements that management believes will
provide for funding for the first phase acquisition.
In connection with the Plan of Reorganization, certain shareholders of
the Company have agreed to subscribe to no more than 33,300 shares of
the Company's common stock at $3.00 per share. The funds are to be used
by LLO-Gas, Inc. to complete the acquisition of the service stations.
The closing of the subscription agreement is to occur on or before
August 10, 1999 for not less than 11,666 shares. The subscription
agreement is not collateralized by any security interest. Provided
there is no failure to perform as to the 11,666 shares, the balance of
the subscription obligation is due and payable at such date as the
seller of the service stations, LLO-Gas, Inc. and a lending institution
may determine, upon not less than ten days notice to the subscribing
shareholders.
(B) Change in Control
----------------------
In June and July of 1999, by virtue of an acquisition of substantially
all of the outstanding stock by a new group, a change in control of the
Company occurred.
8
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
------------------------------
(FORMERLY L.A. ASSOCIATES, INC.)
--------------------------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
FINANCIAL STATEMENTS
--------------------
AS OF JUNE 30, 1999
-------------------
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
---------------------------------
PAGE 1 - ACCOUNTANTS' REVIEW REPORT
PAGE 2 - BALANCE SHEET AS OF JUNE 30, 1999
PAGE 3 - STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND FOR THE PERIOD FROM
JUNE 19, 1990(INCEPTION) TO JUNE 30, 1999
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDERS'
EQUITY FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO JUNE 30, 1999
PAGE 5 - STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND FOR THE PERIOD FROM
JUNE 19, 1990 (INCEPTION) TO JUNE 30, 1999
PAGES 6 - 8 - NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 1999
<PAGE>
ACCOUNTANTS' REVIEW REPORT
--------------------------
To the Board of Directors of:
LA Investment Associates, Inc.
We have reviewed the accompanying balance sheet of LA Investment Associates,
Inc. (formerly L.A. Associates, Inc.) (a development stage company) as of June
30, 1999 and the related statements of operations, changes in stockholders'
equity and cash flows for the six months then ended and for the period from June
19, 1990 (inception) to June 30, 1999, in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of LA Investment Associates,
Inc.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
July 26, 1999
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF JUNE 30, 1999
-------------------
ASSETS
------
Cash $ 3,429
-----------
TOTAL ASSETS $ 3,429
- - - - - - - - - - ------------ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Accounts payable $ 2,259
------------
Total Liabilities 2,259
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value, 25,000,000
shares authorized, 2,100,000 issued and
outstanding 2,100
Additional paid in capital 3,320
Accumulated deficit during development stage (4,250)
-----------
Total Stockholders' Equity 1,170
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,429
- - - - - - - - - - ------------------------------------------ ===========
See accompanying notes to financial statements.
2
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO JUNE 30, 1999
----------------------------
CUMULATIVE FROM
JUNE 19, 1990 (INCEPTION) FOR THE SIX MONTHS
TO JUNE 30, 1999 ENDED JUNE 30, 1999
Income $ - $ -
-------------- --------------
Expenses:
General and
administrative 1,202 152
Professional fees 2,155 2,155
Telephone 964 964
-------------- --------------
Total expenses 4,321 3,271
-------------- --------------
Other Income
Dividend Income 71 71
-------------- --------------
Net Loss $ (4,250) $ (3,200)
- - - - - - - - - - -------- ============== ==============
See accompanying notes to financial statements.
3
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO JUNE 30, 1999
----------------------------
Deficit
Additional Accumulated
Common Paid-In During Devel-
Stock Capital opment Stage Total
----------- ----------- ----------- -----------
August 1990, issuance
of common stock $ 100 $ - $ - $ 100
----------- ----------- ----------- -----------
Balance, December 31,
1990 100 - - 100
August 1991, issuance of
common stock 950 - - 950
Net loss 1991 - (1,050) (1,050)
----------- ----------- ----------- -----------
Balance December 31,
1991 1,050 - (1,050) -
January 1, 1992 -
December 31, 1997 - - - -
----------- ----------- ----------- -----------
Balance, December
31, 1997 1,050 - (1,050) -
October 1998, par value
changed from no par
to $.001 (1,049) 1,049 - -
October 1998, forward
stock split 2,000:1 2,099 (2,099) - -
Net loss for the
year ended December
31, 1998 - - - -
----------- ----------- ----------- -----------
Balance at December
31, 1998 2,100 (1,050) (1,050) -
Increase in paid in
capital - 4,370 - 4,370
Net loss for the six
months ended June 30,
1999 - - (3,200) (3,200)
----------- ----------- ----------- -----------
BALANCE AT
JUNE 30, 1999 $ 2,100 $ 3,320 $ (4,250) $ 1,170
- - - - - - - - - - -------------- =========== =========== =========== ===========
See accompanying notes to financial statements.
4
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
AND FOR THE PERIOD FROM JUNE 19, 1990
(INCEPTION) TO JUNE 30, 1999
----------------------------
CUMULATIVE FROM FOR THE
JUNE 19, 1990 (INCEPTION) SIX MONTHS ENDED
TO JUNE 30, 1999 JUNE 30, 1999
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net loss $ (4,250) $ (3,200)
Adjustments to
reconcile net loss
to net cash used
by operating activities:
Increase in accounts payable 2,259 2,259
Net cash used in
operating activities (1,991) ( 941)
---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES - -
---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in paid in capital 4,370 4,370
Proceeds from issuance
of common stock 1,050 -
---------- ----------
Net cash provided by
financing activities 5,420 4,370
---------- ----------
INCREASE IN CASH AND
CASH EQUIVALENTS 3,429 3,429
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - -
---------- ----------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 3,429 $ 3,429
------------- ========== ==========
See accompanying notes to financial statements.
5
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
-------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- - - - - - - - - - ----------------------------------------------------
A. Organization and Business Operations
----------------------------------------
LA Investment Associates, Inc. (Formerly L.A. Associates, Inc.) (a
development stage company) ("the Company") was incorporated in Nevada
on June 19, 1990 to serve as a vehicle to effect a merger, exchange of
capital stock, asset acquisition or other business combination with a
domestic or foreign private business. At June 30, 1999, the Company had
not yet commenced any formal business operations, and all activity to
date relates to the Company's formation and proposed fund raising.
The Company's ability to commence operations is contingent upon its
ability to identify a prospective target business and raise the capital
it will require through the issuance of equity securities, debt
securities, bank borrowings or a combination thereof.
In June and July of 1999, by virtue of an acquisition of substantially
all of the outstanding stock by a new group, a change in control of the
Company occurred.
B. Use of Estimates
--------------------
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
C. Cash and Cash Equivalents
-----------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
D. Income Taxes
----------------
The Company accounts for income taxes under the Financial Accounting
Standards Board of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" ("Statement 109"). Under Statement 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
6
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
-------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONT'D)
- - - - - - - - - - --------------------------------------------------------------
D. Income Taxes - (CONT'D)
---------------------------
which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. There were no current or
deferred income tax expense or benefits due to the Company not having
any material operations from inception to June 30, 1999.
NOTE 2 - STOCKHOLDERS' EQUITY
- - - - - - - - - - ------------------------------
A. Common Stock
----------------
The Company is authorized to issue 25,000,000 shares of common stock at
$.001 par value. The Company has issued 2,100,000 shares through June
30, 1999.
NOTE 3 - SUBSEQUENT EVENTS
- - - - - - - - - - --------------------------
(A) Agreement and Plan of Reorganization
-----------------------------------------
The Company is in the process of negotiating an Agreement and Plan of
Reorganization with LLO-Gas, Inc., a Delaware corporation, that will
result in the Company acquiring 100% of LLO-Gas, Inc.'s issued and
outstanding stock in consideration for common stock in the Company.
LLO-Gas, Inc. will become a wholly owned subsidiary of the Company.
LLO-Gas, Inc. has agreements with a major oil company to acquire
branded service stations. These are existing combination gas and
convenience stores which have a 15-year supply contract to purchase
petroleum products from the same oil company selling the service
stations. The Company expects to acquire additional existing service
stations and also anticipates developing several branded truck stop
facilities which will be supplied by the same oil company.
LLO-Gas, Inc. has entered into agreements that management believes will
provide for funding for the first phase acquisition.
In connection with the Plan of Reorganization, certain shareholders of
the Company have agreed to subscribe to no more than 33,300 shares of
the Company's common stock at $3.00 per share. The funds are to be used
by LLO-Gas, Inc. to complete the acquisition of the service stations.
The closing of the subscription agreement is to occur on or before
August 10, 1999 for not less than 11,666 shares. The subscription
agreement is
7
<PAGE>
LA INVESTMENT ASSOCIATES, INC.
(FORMERLY L.A. ASSOCIATES, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 1999
-------------------
NOTE 3 - SUBSEQUENT EVENTS - (CONT'D)
- - - - - - - - - - -------------------------------------
A. Agreement and Plan of Reorganization - (CONT'D)
---------------------------------------------------
not collateralized by any security interest. Provided there is no
failure to perform as to the 11,666 shares, the balance of the
subscription obligation is due and payable at such date as the seller
of the service stations, LLO-Gas, Inc. and a lending institution may
determine, upon not less than ten days notice to the subscribing
shareholders.
8
RESTATED ARTICLES OF INCORPORATION OF
LA INVESTMENT ASSOCIATES, INC.
ARTICLE ONE
Name
The name of the Corporation is LA INVESTMENT ASSOCIATES, INC.
ARTICLE TWO
Purpose
The purpose for which this Corporation is organized is to engage in any
lawful act or activity for which corporations may be organized under Nevada
State Law.
ARTICLE THREE
Duration
This corporation shall have a perpetual existence.
ARTICLE FOUR
Shares
The total number of shares of stock the corporation shall have authority to
issue is Twenty Five Million (25,000,000) shares of Common Stock, par value
$.001 per share.
The Board of Directors is authorized to provide for the issuance of the
shares of Preferred Stock in series and, by filing a certificate pursuant
to the applicable law of the State of Nevada, to establish from time to
time the number of shares to be included in each such series, and to fix
the designation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series of
Preferred Stock shall include, but not be limited to, determination of the
following:
A. The number of shares constituting that series and the distinctive
designation of that series;
B. The dividend rate on the shares of that series, whether dividends shall
be cumulative, and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on share of that
series;
C. Whether that series shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
Page 1
<PAGE>
D. Whether that series shall have conversion privileges, and, if so, the
terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of
Directors shall determine;
E. Whether or not the shares of that series shall be redeemable, and, if
so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under
different conditions and at different redemption dates;
F. Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of
such sinking fund;
G. The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation,
and the relative rights of priority, if any, of payment of shares of
that series; and
H. Any other relative rights, preferences and limitations of that series.
ARTICLE FIVE
Board of Directors
Members of the governing board shall be styled directors. The number of
Directors that shall constitute a whole Board shall not be fewer than one.
All directors shall be of full age and they do not need to be shareholders
in the corporation to serve. The number of directors may be increased or
decreased in accordance with the by-laws of the corporation.
ARTICLE SIX
By-Laws
In furtherance and not in limitation of the powers conferred by statute,
the board of directors is expressly authorized to make, repeal, alter,
amend, rescind or adopt the bylaws of this corporation, subject to any
limitations expressed in such bylaws and to repeal or change by action of
the Shareholders.
ARTICLE SEVEN
Pre-emptive Rights
No Shareholder or other person shall have any pre-emptive rights
whatsoever.
ARTICLE EIGHT
Stock Assessments
The capital stock of the corporation, after the amount of the subscription
price has been paid in money, property or services, as the directors shall
determine, shall not be subject to assessment to pay the debts of the
corporation, nor for any other purpose, and no stock issued as fully paid
up shall ever be assessable or assessed, and the Articles of Incorporation
shall not be amended in the particular.
Page 2
<PAGE>
ARTICLE NINE
Voting
Each share of Common Stock has one vote on each matter on which the share
is entitled to vote.
ARTICLE TEN
Interested Directors, Officers and Securityholders
A. Validity. If Paragraph (B) is satisfied, no contract or other
transaction between the Corporation and any of its directors, officers
or security holders, or any corporation or firm in which any of them
are directly or indirectly interested, shall be invalid solely because
of this relationship or because of the presence of the director,
officer or security holder at the meeting of the Board of Directors or
committee authorizing the contract or transaction, or his participation
or vote in the meeting or authorization.
B. Disclosure, Approval, Fairness. Paragraph (A) shall apply only if:
(1) The material facts of the relationship or interest of each such
director, officer or security holder are known or disclosed:
(a) to the Board of Directors or the committee and it nevertheless
authorizes or ratifies the contract or transaction by a
majority of the directors present, each such interested
director to be counted in determining whether a quorum is
present but not in calculating the majority necessary to carry
the vote; or
(b) to the Shareholders and they nevertheless authorize or ratify
the contract or transaction by a majority of the shares
present, each such interested person to be counted for quorum
and voting purposes; or
(2) the contract or transaction is fair to the Corporation as of the
time it is authorized or ratified by the Board of Directors, the
committee or the Shareholders.
ARTICLE ELEVEN
Indemnification and Insurance
A. Persons. The Corporation shall indemnify, to the extent provided in
Paragraphs (B), (D) or (F) and to the extent permitted from time to
time by law:
(1) any person who is or was director, officer, agent or employee of
the Corporation, and
(2) any person who serves or served at the Corporation's request as a
director, officer, agent, employee, partner or trustee of another
corporation or of a partnership, joint venture, trust or other
enterprise.
Page 3
<PAGE>
B. Extent--Derivative Suits. In case of a suit by or in the right of the
Corporation against a person named in Paragraph (A) by reason of his
holding a position named in Paragraph (A), the Corporation shall
indemnify him, if he satisfies the standard in Paragraph (C), for
expenses (including attorney's fees but excluding amounts paid in
settlement) actually and reasonably incurred by him in connection with
the defense or settlement of the suit.
C. Standard--Derivative Suits. In case of a suit by or in the right of the
Corporation, a person named in Paragraph (A) shall be indemnified only
if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the subject of
the suit, and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Corporation. However, he
shall not be indemnified in respect of any claim, issue or matter
as to which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the Corporation
unless (and only to the extent that) the court in which the suit
was brought shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is fairly
and reasonably entitled to indemnity for such expenses as the
court shall deem proper.
D. Extent--Nonderivative Suits. In case of a suit, action or proceeding
(whether civil, criminal, administrative or investigative), other than
a suit by or in the right of the Corporation against a person named in
Paragraph (A) by reason of his holding a position named in Paragraph
(A), the Corporation shall indemnify him, if he satisfies the standard
in Paragraph (E), for amounts actually and reasonably incurred by him
in connection with the defense or settlement of the suit as
(1) expenses (including attorneys' fees),
(2) amounts paid in settlement
(3) judgments, and
(4) fines.
E. Standard--Nonderivative Suits. In case of a nonderivative suit, a
person named in Paragraph (A) shall be indemnified only if:
(1) he is successful on the merits or otherwise, or
(2) he acted in good faith in the transaction which is the subject of
the nonderivative suit, and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation
and , with respect to any criminal action or proceeding, he had no
reason to believe his conduct was unlawful. The termination of a
nonderivative suit by judgement, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person failed to satisfy
this Paragraph (E) (2).
Page 4
<PAGE>
F. Determination That Standard Has Been Met. A determination that the
standard of Paragraph (C) or (E) has been satisfied may be made by a
court of law or equity or the determination may be made by:
(1) a majority of the directors of the Corporation (whether or not a
quorum) who were not parties to the action, suit or proceeding, or
(2) independent legal counsel (appointed by a majority of the
directors of the Corporation, whether or not a quorum, or elected
by the Shareholders of the Corporation) in a written opinion, or
(3) the Shareholders of the Corporation.
G. Pro-ration. Anyone making a determination under Paragraph (F) may
determine that a person has met the standard as to some matters but not
as to others, and may reasonably prorate amounts to be indemnified.
H. Advance Payment. The Corporation may pay in advance any expenses
(including attorney's fees) which may become subject to indemnification
under paragraphs (A) - (G) if:
(1) the Board of Directors authorizes the specific payment and
(2) the person receiving the payment undertakes in writing to repay
unless it is ultimately determined that he is entitled to
indemnification by the Corporation under Paragraphs (A) - (G).
I. Nonexclusive. The indemnification provided by Paragraphs (A) - (G)
shall not be exclusive of any other rights to which a person may be
entitled by law or by by-law, agreement, vote of Shareholders or
disinterested directors, or otherwise.
J. Continuation. The indemnification and advance payment provided by
Paragraphs (A) - (H) shall continue as to a person who has ceased to
hold a position named in paragraph (A) and shall inure to his heirs,
executors and administrators.
K. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who holds or who has held any position named in
Paragraph (A) against any liability incurred by him in any such
positions or arising out of this status as such, whether or not the
Corporation would have power to indemnify him against such liability
under Paragraphs (A) - (H).
L. Reports. Indemnification payments, advance payments, and insurance
purchases and payments made under Paragraphs (A) - (K) shall be
reported in writing to the Shareholders of the Corporation with the
next notice of annual meeting, or within six months, whichever is
sooner.
Page 5
<PAGE>
M. Amendment of Article. Any changes in the General Corporation Law of
Nevada increasing, decreasing, amending, changing or otherwise
effecting the indemnification of directors, officers, agents, or
employees of the Corporation shall be incorporated by reference in this
Article as of the date of such changes without further action by the
Corporation, its Board of Directors, of Shareholders, it being the
intention of this Article that directors, officers, agents and
employees of the Corporation shall be indemnified to the maximum degree
allowed by the General Corporation Law of the State of Nevada at all
times.
ARTICLE TWELVE
Limitation On Director Liability
A. Scope of Limitation. No person, by virtue of being or having been a
director of the Corporation, shall have any personal liability for
monetary damages to the Corporation or any of its Shareholders for any
breach of fiduciary duty except as to the extent provided in Paragraph
(B).
B. Extent of Limitation. The limitation provided for in this Article shall
not eliminate or limit the liability of a director to the Corporation
or its Shareholders (i) for any breach of the director's fiduciary duty
to the Corporation or its Shareholders (ii) for intentional misconduct
or a knowing violation of law.
IN WITNESS WHEREOF, the undersigned President and Secretary of LA
Investment Associates, Inc., a Nevada corporation (the "Corporation"), and
who is duly authorized by a resolution past October 21st 1999, does
hereunto execute this certificate as of the date below.
Randall H.Prouty
/s/ Randall H. Prouty Date:
------------------------------------ -------------------
President and Secretary
Page 6
BY-LAWS
OF
LA INVESTMENT ASSOCIATES, INC
ARTICLE I
OFFICES
1. PRINCIPAL OFFICE. The principal office for the transaction of business
of the corporation shall be fixed or may be changed by approval of a
majority of the authorized Directors, and additional offices may be
established and maintained at such other place or places as the Board
of Directors may from time to time designate.
2. OTHER OFFICES. Branch or subordinate offices may at any time be
established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the provisions of
applicable law and to any limitations in the Articles of Incorporation
of the corporation relating to action required to be approved by the
Shareholders, or by the outstanding shares, the business and affairs of
the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board of Directors. The
Board may delegate the management of the day to day operation of the
corporations business to an executive committee or others, provided
that the business and affairs of the corporation shall be managed and
all corporate powers shall be exercised under the ultimate direction of
the Board.
2. STANDARD OF CARE. Each Director shall perform the duties of a Director,
including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director
believes to be in the best interests of the corporation, and with such
care, including reasonable inquiry, as an ordinary prudent person in a
like position would use under similar circumstances.
3. NUMBER AND QUALIFICATION OF DIRECTORS. The number of Directors that
shall constitute a whole Board shall be at least one (1) or more as
determined by the majority of the Board from time to time by an
amendment to this by-law, and adopted by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote.
<PAGE>
4. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at
each annual meeting of the Shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a
vacancy, shall hold office until the expiration of the term for which
elected and until a successor has been elected and qualified.
5. VACANCIES. Vacancies in the Board of Directors may be filled by a
majority of the remaining Directors, though less than a quorum, or by a
sole remaining Director, except that a vacancy created by the removal
of a Director by the vote or written consent of the Shareholders or by
court order may be filled only by the vote of a majority of the shares
entitled to vote represented at a duly held meeting at which a quorum
is present, or by the written consent of holders of a majority of the
outstanding shares entitled to vote. Each Director so elected shall
hold office until the next annual meeting of the Shareholders and until
a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any
Director, or if the Board of Directors by resolution declares vacant
the office of a Director who has been declared of unsound mind by an
order of court or convicted of a felony, or if the authorized number of
Directors is increased, or if the Shareholders fail, at any meeting of
Shareholders at which any Director or Directors are elected, to elect
the number of Directors to be voted for at that meeting.
The Shareholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors, but any such
election, or if by written consent, shall require the consent of a
majority of the outstanding shares entitled to vote.
Any Director may resign effective on giving written notice to the
Chairman of the Board, the President, the Secretary, or the Board of
Directors, unless the notice specifies a later time for that
resignation to become effective. If the resignation of a Director is
effective at a future time, the Board of Directors may elect a
successor to take office when the resignation becomes effective.
No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Directors' term of office
expires.
6. REMOVAL OF DIRECTORS. Subject to applicable law, the entire Board of
Directors or any individual Director may be removed from office. In
such case, the remaining Board members may elect a successor Director
to fill such vacancy for the remaining unexpired term of the Director
so removed.
7. NOTICE. PLACE AND MANNER OF MEETINGS. Meetings of the Board of
Directors may be called by the Chairman of the Board, or the President,
or any Vice President, or the Secretary, or any two (2) Directors and
shall be held at the principal executive office of the corporation,
unless some other place is designated in the notice of the meeting.
Members of the Board may participate in a meeting through use of a
conference telephone or similar communications equipment so long as all
members participating in such a meeting can hear one another. Accurate
minutes of any meeting of the Board or any committee thereof, shall be
maintained by the Secretary or other Officer designated for that
purpose.
<PAGE>
8. ORGANIZATIONAL MEETINGS. The organizational meetings of the Board of
Directors shall be held immediately following the adjournment of the
Annual Meetings of the Shareholders.
9. OTHER REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at the corporate offices, or such other place as may be
designated by the Board of Directors, as follows:
Time of Regular Meeting: 9:00 A.M.
Date of Regular Meeting: Last Friday of every month
If said day shall fall upon a holiday, such meetings shall be held on
the next succeeding business day thereafter. No notice need be given of
such regular meetings.
10. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of the Board may
be called at any time by the President or, if he or she is absent or
unable or refuses to act, by any Vice President or the Secretary or by
any two (2) Directors, or by one (1) Director if only one is provided.
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph.
If the notice is sent to a Director by letter, it shall be addressed to
him or her at his or her address as it is shown upon the records of the
corporation, or if it is not so shown on such records or if not readily
ascertainable, at the place in which the meetings of the Directors are
regularly held. In case such notice is mailed, it shall be deposited in
the United States mail, postage prepaid, in the place in which the
principal executive officer of the corporation is located at least four
(4) days prior to the time of the holding of the meeting. Such mailing,
telegraphing, telephoning or delivery as above provided shall be due,
legal and personal notice to such Director.
When all of the Directors are present at any Directors' meeting,
however, called or noticed, and either (i) sign a written consent
thereto on the records of such meeting, or, (ii) if a majority of the
Directors is present and if those not present sign a waiver of notice
of such meeting or a consent to holding the meeting or an approval of
the minute thereof, whether prior to or after the holding of such
meeting, which said waiver, consent or approval shall be filed with the
Secretary of the corporation, or, (iii) if a Director attends a meeting
without notice but without protesting, prior thereto or at its
commencement, the lack of notice, then the transactions thereof are as
valid as if had at a meeting regularly called and noticed.
<PAGE>
11. DIRECTORS' ACTION BY UNANIMOUS WRITTEN CONSENT. Any action required or
permitted to be taken by the Board of Directors may be taken without a
meeting and with the same force and effect as if taken by a unanimous
vote of Directors, if authorized by a writing signed individually or
collectively by all members of the Board. Such consent shall be filed
with the regular minutes of the Board.
12. QUORUM.. A majority of the number of Directors as fixed by the Articles
of Incorporation or By-Laws shall be necessary to constitute a quorum
for the transaction of business, and the action of a majority of the
Directors present at any meeting at which there is a quorum, when duly
assembled, is valid as a corporate act; provided that a minority of the
Directors, in the absence of a quorum, may adjourn from time to time,
but may not transact any business. A meeting at which a quorum is
initially present may continue to transact business, notwithstanding
the withdrawal of Directors, if any action taken is approved by a
majority of the required quorum for such meeting.
13. NOTICE OF ADJOURNMENT. Notice of the time and place of holding an
adjourned meeting need not be given to absent Directors if the time and
place be fixed at the meeting adjourned and held within twenty-four
(24) hours, but if adjourned more than twenty-four (24) hours, notice
shall be given to all Directors not present at the time of the
adjournment.
14. COMPENSATION OF DIRECTORS. Directors, as such, shall not receive any
stated salary for their services. However, the Board may, by resolution
of the Board, fix a sum and expense for attendance at any meeting or it
may otherwise provide for an issuance or other compensation it deems
appropriate. Nothing herein contained shall be construed to preclude
any Director from serving the corporation in any other capacity and
receiving compensation therefor.
15. COMMITTEES. Committees of the Board may be appointed by resolution
passed by a majority of the whole Board. Committees shall be composed
of two (2) or more members of the Board and shall have such powers of
the Board as may be expressly delegated to it by resolution of the
Board of Directors, except those powers expressly made non-delegable by
applicable law.
16. ADVISORY DIRECTORS. The Board of Directors from time to time may elect
one or more persons to be Advisory Directors who shall not by such
appointment be members of the Board of Directors. Advisory Directors
shall be available from time to time to perform special assignments
specified by the President, to attend meetings of THE Board of
Directors upon invitation and to furnish consultation to the Board. The
period during which the title shall be held may be prescribed by the
Board of Directors. If no period is prescribed, the title shall be held
at the pleasure of the Board.
<PAGE>
17. RESIGNATIONS. Any Director may resign effective upon giving written
notice to the Chairman of the Board, the President, the Secretary or
the Board of Directors of the Corporation, unless the notice specifies
a later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected
to take office when the resignation becomes effective.
ARTICLE III
OFFICERS
1. OFFICERS. The Officers of the corporation shall be a President, a
Secretary, and Treasurer. The corporation may also have, at the
discretion of the Board of Directors, a Chairman of the Board, one or
more Vice Presidents, one or more Assistant Secretaries, or one or more
Assistant Treasurers, and such other Officers as may be appointed in
accordance with the provisions of Section 3 of this Article. Any number
of offices may be held by the same person.
2. ELECTION. The Officers of the corporation, except such Officers as may
be appointed in accordance with the provisions of Section 3 or Section
5 of this Article, shall be chosen annually by the Board of Directors,
and each shall hold office until he or she shall resign or shall be
removed or otherwise disqualified to serve or a successor shall be
elected and qualified.
3. SUBORDINATE OFFICERS ETC. The Board of Directors may appoint such other
Officers as the business of the corporation may require, each of whom
shall hold office for such period, have such authority and perform such
duties as are provided by the By-Laws or as the Board of Directors may
from time to time determine.
4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if any, of
any Officer under any contract of employment, any Officer may be
removed, either with or without cause, by the Board of Directors, at
any regular or special meeting of the Board, or except in case of an
Officer chosen by the Board of Directors by any Officer upon whom such
power of removal may be conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the
receipt of that notice or at any later time specified in that notice;
and, unless otherwise specified in that notice, the acceptance of the
resignation shall not be necessary to make it effective. Any
resignation is without prejudice to the rights, if any, of the
corporation under any contract to which the Officer is a party.
5. VACANCIES. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filed in the
manner prescribed in the By-Laws for regular appointment to that
office.
<PAGE>
6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an officer be
elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may
be from time to time assigned by the Board of Directors or prescribed
by the By-Laws. If there is no President, the Chairman of the Board
shall in addition be the Chief Executive Officer of the corporation and
shall have the powers and duties prescribed in Section 7 of this
Article.
7. PRESIDENT/CHIEF EXECUTIVE OFFICER. Subject to such supervisory powers,
if any, as may be given by the Board of Directors to the Chairman of
the Board, if there be such an Officer, the President shall be the
Chief Executive Officer of the corporation and shall, subject to the
control of the Board of Directors, have general supervision, direction
and control of the business and Officers of the corporation. He or she
shall preside at all meetings of the Shareholders and in the absence of
the Chairman of the Board, or if there be none, at all meetings of the
Board of Directors. The President shall be ex officio a member of all
the standing committees, including the Executive Committee, if any, and
shall have the general powers and duties of management usually vested
in the office of President of a corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or the
By-Laws.
8. VICE PRESIDENT. In the absence or disability of the President, the Vice
Presidents, if any, in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board
of Directors, shall perform all the duties of the President, and when
so acting shall have all the powers of, and be subject to, all the
restrictions upon, the President. The Vice Presidents shall have such
other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board of Directors or the
By-Laws.
9. SECRETARY. The Secretary shall keep, or cause to be kept, a book of
minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of Directors and Shareholders,
with the time and place of holding, whether regular or special, and if
special, how authorized, the notice thereof given, the names of those
present at Directors' meetings, the number of shares present or
represented at Shareholders' meetings and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office
or at the office of the corporation's transfer agent, a share register,
or duplicate share register showing the names of the Shareholders and
their addresses, the number and classes of shares held by each, the
number and date of certificates issued for the same, and the number and
date of cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the Shareholders and of the Board of Directors required by
the By-Laws or by law to be given. He or she shall keep the seal of the
corporation in safe custody, and shall have such other powers and
perform such other duties as may be prescribed by the Board of
Directors or by the By-Laws.
<PAGE>
10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep and
maintain, or cause to be kept and maintained in accordance with
generally accepted accounting principles, adequate and correct accounts
of the properties and business transactions of the corporation,
including accounts of its assets, liabilities, receipts, disbursements,
gains, losses, capital, earnings (or surplus) and shares. The books of
accounts shall at all reasonable times be open to inspection by any
Director.
This Officer shall deposit all moneys and other valuables in the name
and to the credit of the corporation with such depositories as may be
designated by the Board of Directors. He or she shall disburse the
funds of the corporation as may be ordered by the Board of Directors,
shall render to the President and Directors, whenever they request it,
an account of all of his or her transactions and of the financial
condition of the corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board of
Directors or the By-Laws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
1. PLACE OF MEETINGS. All meetings of the Shareholders shall be held at
the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from
time to time by the Board of Directors.
2. ANNUAL MEETINGS. The annual meetings of the Shareholders shall be held,
each year, at the time and on the day following or on any other date
the Board may decide from time to time.
Time of Meeting: 10:00 A.M.
Date of Meeting: April 20th
If this day shall be a legal holiday, then the meeting shall be held on
the next succeeding business day, at the same hour. At the annual
meeting, the Shareholders shall elect a Board of Directors, consider
reports of the affairs of the corporation and transact such other
business as may be properly brought before the meeting.
3. SPECIAL MEETINGS. Special meetings of the Shareholders may be called at
any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more
Shareholders holding not less than one-tenth (1/10) of the voting power
of the corporation. Except as next provided, notice shall be given as
for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such
Officer by any person (other than the Board) entitled to call a special
meeting of Shareholders, such Officer shall cause notice to be given,
to the Shareholders entitled to vote, that a meeting will be held at a
time requested by the person or persons calling the meeting, not less
than thirty-five (35) nor more than sixty (60) days after the receipt
of such request. If such notice is not given within twenty (20) days
after receipt of such request, the persons calling the meeting may give
notice thereof in the same manner provided by these By-Laws.
<PAGE>
4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or special,
shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to
vote thereat. Such notice shall be given by the Secretary or the
Assistant Secretary, or if there be no such Officer, or in the case of
his or her neglect or refusal, by any Director or Shareholder.
Such notices or any reports shall be given personally or by mail and
shall be sent to the Shareholder's address appearing on the books of
the corporation, or supplied by him or her to the corporation for the
purpose of the notice.
Notice of any meeting of Shareholders shall specify the place, the day
and the hour of meeting, and (1) in case of a special meeting, the
general nature of the business to be transacted and no other business
may be transacted, or (2) in the case of an annual meeting, those
matters which Board at date of mailing, intends to present for action
by the Shareholders. At any meetings where Directors are to be elected
notice shall include the names of the nominees, if any, intended at
date of notice to be presented by management for election.
If a Shareholder supplies no address, notice shall be deemed to have
been given if mailed to the place where the principal executive office
of the corporation is situated, or published at least once in some
newspaper of general circulation in the County of said principal
office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication.
The Officer giving such notice or report shall prepare and file an
affidavit or declaration thereof.
When a meeting is adjourned for forty-five (45) days or more, notice of
the adjourned meeting shall be given as in case of an original meeting.
Save, as aforesaid, it shall not be necessary to give any notice of
adjournment or of the business to be transacted at an adjourned meeting
other than by announcement at the meeting at which said adjournment is
taken.
5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of
any meeting of Shareholders, however called and notice, shall be valid
as through had at a meeting duly held after regular call and notice, if
a quorum be present either in person or by proxy, and if, either before
or after the meeting, each of the Shareholders entitled to vote, not
present in person or by proxy, sign a written waiver of notice, or a
consent to the holding of such meeting or an approval shall be filed
with the corporate records or made a part of the minutes of the
meeting. Attendance shall constitute a waiver of notice, unless
objection shall be made as provided in applicable law.
<PAGE>
6. SHAREHOLDERS ACTING WITHOUT A MEETING - DIRECTORS. Any action which may
be taken at a meeting of the Shareholders, may be taken without a
meeting or notice of meeting if authorized by a writing signed by all
of the Shareholders entitled to vote at a meeting for such purpose, and
filed with the Secretary of the corporation, provided, further, that
while ordinarily Directors can be elected by unanimous written consent,
if the Directors fail to fill a vacancy, then a Director to fill that
vacancy may be elected by the written consent of persons holding a
majority of shares entitled to vote for the election of Directors .
7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided for under
applicable law or the Articles of Incorporation, any action which may
be taken at any annual or special meeting of Shareholders may be taken
without a meeting and without prior notice, if a consent in writing,
setting forth the action so taken, signed by the holders of outstanding
shares having not less than the minimum number of votes that would be
necessary to authorize to take such action at a meeting at which all
shares entitled to vote thereon were present and voted.
Any Shareholder giving a written consent, or the Shareholder's
proxyholders, or a transferee of the shares of a personal
representative of the Shareholder or their respective proxyholders, may
revoke the consent by a writing received by the corporation prior to
the time that written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary of the
corporation, but may not do so thereafter. Such revocation is effective
upon its receipt by the Secretary of the corporation.
8. QUORUM. The holder of a majority of the shares entitled to vote
thereat, present in person, or represented by proxy, shall constitute a
quorum at all meetings of the Shareholders for the transaction of
business except as otherwise provided by law, by the Articles of
Incorporation, or by these By-Laws. If, however, such majority shall
not be present or represented at any meeting of the Shareholders, the
shareholders entitled to vote thereat, present in person, or by proxy,
shall have the power to adjourn the meeting from time to time, until
the requisite amount of voting shares shall be present. At such
adjourned meeting at which the requisite amount of voting shares shall
be represented, any business may be transacted which might have been
transacted at a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to
transact business until adjournment, notwithstanding the withdrawal of
enough Shareholders to leave less than a quorum, if any action taken is
approved by a majority of the Shareholders required to initially
constitute a quorum.
9. VOTING. Only persons in whose names shares entitled to vote stand on
the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day be fixed by the Board of Directors
for the determination of Shareholders of record, and then on such other
day, shall be entitled to vote at such meeting. There shall be no
cumulative voting.
The Board of Directors may fix a time in the future not exceeding
thirty (30) days preceding the date of any meeting of Shareholders or
the date fixed for the payment of any dividend or distribution, or for
the allotment of rights, or when any change or conversion or exchange
of shares shall go into effect, as a record date for the determination
of the Shareholders entitled to notice of and to vote at any such
meeting, or entitled to receive any such dividend or distribution, or
any allotment of rights or to exercise the rights in respect to any
such change, conversion or exchange of shares. In such case only
Shareholders of record on the date so fixed shall be entitled to notice
of and to vote at such meeting, to receive such dividends, distribution
or allotment of rights, or to exercise such rights, as the case may be
notwithstanding any transfer of any share on the books of the
corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the corporation against transfers of
shares during the whole or any part of such period.
<PAGE>
10. PROXIES. Every Shareholder entitled to vote, or to execute consents,
may do so, either in person or by written proxy, executed in accordance
with the provisions of applicable law filed with the Secretary of the
corporation.
11. ORGANIZATION. The President, or in the absence of the President, any
Vice President, shall call the meeting of the Shareholders to order,
and shall act as Chairman of the meeting. In the absence of the
President and all of the Vice Presidents, Shareholders shall appoint a
Chairman for such meeting. The Secretary of the corporation shall act
as Secretary of all meetings of the Shareholders, but in the absence of
the Secretary at any meeting of the Shareholders, the presiding Officer
may appoint any person to act as Secretary of the meeting.
12. INSPECTORS OF ELECTION. In advance of any meeting of Shareholders, the
Board of Directors may, if they so elect, appoint inspectors of
election to act at such meeting or any adjournment thereof. If
inspectors of election be not so appointed, or if any persons so
appointed fail to appear or refuse to act, the chairman of any such
meeting may, and on the request of any Shareholder or his or her proxy
shall, make such appointment at the meeting in which case the number of
inspectors shall be either one (1) or three (3) as determined by a
majority of the Shareholders represented at the meeting.
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
1. CERTIFICATES FOR SHARES. Certificates for shares shall be of such form
and device as the Board of Directors may designate and shall state the
name of the record holder of the shares represented thereby; its
number; date of issuance; the number of shares for which it is issued;
a statement of the rights, privileges preferences and restriction, if
any; a statement as to the redemption or conversion, if any; a
statement of liens or restrictions upon transfer or voting, if any; if
the shares be assessable or, if assessments are collectible by personal
action, a plain statement of such facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or
Vice President and by the Chief Financial Officer or an Assistant
Treasurer or the Secretary or any Assistant Secretary, certifying the
number of shares and the class or series of shares owned by the
Shareholder.
Any or all of the signatures on the certificate may be facsimile. In
case any Officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed on a certificate shall have ceased
to be that Officer, transfer agent, or registrar before that
certificate is issued, it may be issued by the corporation with the
same effect as if that person were an Officer, transfer agent, or
registrar at the date of issuance.
2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority
to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate
and record the transaction upon its books.
<PAGE>
3. LOST OR DESTROYED CERTIFICATES. Any person claiming a certificate of
stock to be lost or destroyed shall make an affidavit or affirmation of
that fact and shall, if the Directors so require, give the corporation
a bond of indemnity, in form and with one or more sureties satisfactory
to the Board, in at least double the value of the stock represented by
said certificate, whereupon a new certificate may be issued in the same
tender and for the same number of shares as the one alleged to be lost
or destroyed.
4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may appoint one
or more transfer agents or transfer clerks, and one or more registrars
which shall be an incorporated bank or trust company, either domestic
or foreign, who shall be appointed at such times and places as the
requirements of the corporation may necessitate and the Board of
Directors may designate .
5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that the
corporation may determine the Shareholders entitled to notice of any
meeting or to vote or entitled to receive payment of any dividend or
other distribution or allotment of any rights or entitled to exercise
any rights in respect to any other lawful action, the Board may fix, in
advance, a record date, which shall not be more than sixty (60) days
nor less than ten (10) days prior to the date of such meeting nor more
than sixty (60) days prior to any other action.
If no record date is fixed; the record date for determining
Shareholders entitled to notice of or to vote at a meeting of
Shareholders shall be at the close of business on the business day next
preceding the day on which notice is given or if notice is waived, at
the close of business on the business day next preceding the day on
which the meeting is held. The record date for determining Shareholders
entitled to give consent to corporate action in writing without a
meeting, when no prior action by the Board is necessary, shall be the
day on which the first written consent is given.
The record date for determining Shareholders for any other purpose
shall be at the close of business on the day on which the Board adopts
the resolution relating thereto, or the sixtieth (60th) day prior to
the date of such other action, whichever is later.
ARTICLE VI
RECORDS - REPORTS - INSPECTION
1. RECORDS. The corporation shall maintain, in accordance with generally
accepted accounting principles, adequate and correct accounts, books
and records of its business and properties. All of such books, records
and accounts shall be kept at its principal executive office as fixed
by the Board of Directors from time to time.
2. INSPECTION OF BOOKS AND RECORDS. All books and records shall be open to
inspection of the Directors and Shareholders from time to time and in
the manner provided under applicable law.
3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a copy of
these By-Laws, as amended or otherwise altered to date, certified by
the Secretary, shall be kept at the corporation's principal executive
office and shall be open to inspection by the Shareholders at all
reasonable times during office hours.
4. CHECK. DRAFTS ETC. All checks, drafts, or other orders for payment of
money, notes or other evidences of indebtedness, issued in the name of
or payable to the corporation, shall be signed or endorsed by such
person or persons and in such manner as shall be determined from time
to time by the Board of Directors .
5. CONTRACT. ETC. HOW EXECUTED. The Board of Directors, except if provided
for otherwise in the By-Laws, may authorize any Officer or Officers,
agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the corporation. Such authority may be
general or confined to specific instances. Unless so authorized by the
Board of Directors, no Officer, agent or employee shall have any power
or authority to bind the corporation by any contract or agreement, or
to pledge its credit, or to render it liable for any purpose or to any
amount except as may be provided under applicable law.
<PAGE>
ARTICLE VII
ANNUAL REPORTS
1. REPORT TO SHAREHOLDERS DUE DATE. The Board of Directors shall cause an
annual report to be sent to the Shareholders not later than one hundred
twenty (120) days after the close of the fiscal or calendar year
adopted by the corporation. This report shall be sent at least fifteen
(15) days before the annual meeting of Shareholders to be held during
the next fiscal year and in the manner specified in Section 4 of the
Article IV of these By-Laws for giving notice to Shareholders of the
corporation. The annual report shall contain a balance sheet as of the
end of the fiscal year and an income statement and statement of changes
in financial position for the fiscal year, accompanied by any report of
independent accountants or, if there is no such report, the certificate
of an authorized officer of the corporation that the statements were
prepared without audit from the books and records of the corporation.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or these By-Laws
may be amended or repealed by the vote or written consent of holders of
a majority of the out-standing shares entitled to vote; provided,
however, that if the Articles of Incorporation of the corporation set
forth the number of authorized Directors of the corporation, the
authorized number of Directors may be changed only by an amendment of
the Article of Incorporation.
2. POWERS OF DIRECTORS. Subject to the right of the Shareholders to adopt,
amend or repeal By-Laws, as provided in Section 1 of this Article VIII,
and the limitations, if any, under law, the Board of Directors may
adopt, amend or repeal any of these By-Laws, except that the number of
authorized number of Directors may not be changed.
3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is adopted,
it shall be copied in the book of By-Laws with the original By-Laws, in
the appropriate place. If any By-Law is repealed, the fact of repeal
with the date of the meeting at which the repeal was enacted or written
assent was filed shall be stated in said book.
ARTICLE IX
CORPORATE SEAL
1. SEAL. The corporate seal shall be circular in form, and shall have
inscribed thereon the name of the corporation, the date and State of
incorporation.
ARTICLE X
MISCELLANEOUS
1. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of other
corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice
President and the Secretary or an Assistant Secretary.
2. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by a
subsidiary shall not be entitled to vote on any matter. A subsidiary
for these purposes is defined as a corporation, the shares of which
possessing more than 25% of the total combined voting power of all
classes of shares entitled to vote, are owned directly or indirectly
through one (1) or more subsidiaries .
<PAGE>
3. INDEMNITY. Subject to applicable law, the corporation may indemnify any
Director, Officer, agent or employee as to those liabilities and on
those terms and conditions as appropriate. In any event, the
corporation shall have the right to purchase and maintain insurance on
behalf of any such persons whether or not the corporation would have
the power to indemnify such person against the liability insured
against.
4. ACCOUNTING YEAR. The accounting year of the corporation shall be fixed
by resolution of the Board of Directors.
LA INVESTMENT ASSOCIATES, INC.
NUMBER SHARES
[ ] [ ]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
25,000,000 SHARES OF COMMON STOCK AUTHORIZED, $.001 PAR VALUE
CUSIP 50345T105
SEE REVERSE FOR
CERTAIN DEFINITIONS
THIS CERTIFIES THAT ___________________________________
IS THE OWNER OF __________________
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
LA INVESTMENT ASSOCIATES, INC.
transferable only on the books of the Corporation in person or by duly
authorized attorney upon surrender of this certificate properly endorsed. This
certificate and the shares represented hereby are subject to the laws of the
State of Nevada, and the Certificate of Incorporation and Bylaws of the
Corporation, as now or hereafter amended. This Certificate is not valid unless
countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and signature of its duly
authorized officers.
Date
[SEAL OF LA INVESTMENT ASSOCIATES, INC.]
- - - - - - - - - - -------------------- --------------------
President Secretary
COUNTERSIGNED
Pacific Stock Transfer Company P.O. Box 93385 Las Vegas, NV 89193
-------------------------
authorized signature
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 3429
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3429
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3429
<CURRENT-LIABILITIES> 2259
<BONDS> 0
0
0
<COMMON> 2100
<OTHER-SE> (930)
<TOTAL-LIABILITY-AND-EQUITY> 3429
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3271
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3200)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3200)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3200)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
